History

From 1958 to Present

Continental Laboratories has come a long way since
its humble beginnings as a bare-bones operation
in 1958. Today, Continental celebrates its 48th
anniversary as a supplier of mud logging services.
That's just one reason for the multi-faceted Calgary
company to celebrate, however. The anniversary
comes at a time, with the economic upswing in the
petroleum industry in Canada, when business can
best be described with one word: robust.

The road
to success was not always so easily traveled.
Continental Laboratories survived a wild roller-coaster
ride during the oilpatch bust in the early 1980s
that saw an empire of six international offices--active
in locations at opposite ends of the continent--fragment
and spin-off into separate businesses. The newly-orphaned
Calgary research and development outpost was snapped up by a high-tech electronics
company in what can best be described as a bad fit. Ultimately, the new owner
wasn't prepared to wait out the economic downturn to reap the rewards of its
investment. So when Continental was put back on the block in 1985, a core group
of the company's senior management leapt at the opportunity to buy Continental
outright. What was once an isolated international outpost was now a 100% Canadian-owned
private company.

It was a fortuitous development, for both the new owners and the oilpatch.
Since 1985, Continental Laboratories has grown from employing just three
geologists to 30; altogether, it employs 56 specialists in jobs ranging from
hydrocarbon logging analysis to programming to sales. It owns outright its
headquarters, a spacious 5,500 square-foot building near the Calgary airport.

Continental Laboratories chairman James (Sandy)
Pennington attributes the company's financial muscle
to many factors, but says most of the credit must
go to Richard F. Mercer, who managed the company
from 1962 to 1983. Considered a pioneer in the
industry, the John Hopkins University-educated
Mr. Mercer is credited with bringing the mud-logging
hydrocarbon industry into the mainstream and extending
that professional credibility to Continental Laboratories. "He
really pulled Continental up by the bootstraps
and got it going," acknowledges Mr. Pennington. "He
was a real driving force and, of course, I worked
with him right and left all through the company."

It is fair to say Mr.Pennington, a fourth-generation Albertan and the first
Canadian ever hired by Continental Laboratories, shares Mr. Mercer's dedication
and vision for the company. He continues to use the ultra-conservative style
of his predecessor to successfully steer Continental and its wholly-owned subsidiary,
CL Consultants Limited, through the oft-stormy developments in the petroleum
industry. Such cautious management has kept Continental Laboratories and its
core offerings--mud logging services, complete well site geology services and
equipment manufacturing--solvent through the years while its main competitor
has gone bankrupt four times. While Mr. Pennington admits this conservative
attitude may have cost the company some opportunities, he says it is a risk
Continental was willing to take. "The industry is very unforgiving," he
says. "You can do 100 jobs well, but make one mistake and the whole patch
knows about it."

Still, that doesn't mean Continental Laboratories shies away from innovation.
Quite the opposite. The company helped revolutionize the oilpatch by creating
the MP 2100, one of the first-ever computer based portable gas detectors. Improvements
over time have resulted in the development of the MP 2300 and the latest MP
2500, a remote analytical unit which employs radio transmissions of the results
to the geologist's working quarters.

Continental is also an industry leader in the creation of in-house interpretive
software programs. Its Geo-Print and Geo-Print M software incorporates data
produced by the instrumentation, and generates the strip logs and hydrocarbon
logs. Well-site geologists are now able to upload accurate data from the field
to the office in a matter of minutes. The company is considered a premier training
ground for the mud-logging industry. In addition to designing and manufacturing
all its own instrumentation and owning valuable industry resources like a mud-log
library with over 3,500 records, Continental provides free industry seminars
annually while CL Consultants offers up-to-the-minute training for short-term
or extended contracts.

Moreover, Continental Laboratories is the only mud-logging company in Canada
which offers a highly specialized well review. Once the well is finished, two
of Continental¹s leading experts, president Alex Finnie and senior
technical representative Deno Adams, conduct a complete review of the data
and present a detailed log to the client. "We have two of the best experts
in the industry here in our office," says Mr. Pennington. "It is
a service that I know our competition can't match. This is what makes us number
one in Canada."

Still, providing outstanding services does not mean much without the proper
support, and Continental Laboratories excels in customer service. The company
prides itself on its ability to do any job no matter the time of day, even
those last-minute jobs which inevitably drift in late on Friday afternoons.
All employees, including Mr. Pennington and Mr. Finnie, are on call on rotating
weekends. And they deliver. On one recent Saturday, the company encountered
difficulties trying to fly some much-needed equipment to a client in the United
States. Mr. Pennington rented a truck and drove the equipment across the border
himself. "Titles don't mean anything here". "We all do anything,
anytime for a customer" Indeed, Mr. Pennington says going above and beyond
the call of duty is what has earned Continental Laboratories such a favourable
reputation within the industry. "You need three things in order to run
a successful company: good people, enthusiastic people and a common mandate," he
says. "Our mandate is to give service."

Ask employees at Continental Laboratories what makes them go the extra mile
for their customers and they will tell you the company's relaxed and respectful
management style has a lot to do with it. There is no common company head at
Continental Laboratories, nor is the company run with a presidency-down-to-the-employees
attitude. Everyone is encouraged to take an active part in the company by regularly
submitting suggestions for ways to improve the services provided by Continental
and its subsidiaries. Mr. Finnie says this equal-responsibility approach has
fostered a positively charged and enthusiastic work environment which is second
to none. "Yes, we have offices and there certainly are doors, but you
rarely find them closed," he says.

Perhaps it is not surprising, then, that Continental's people share the company's
vision. Mr. Pennington has been with the company for 40 years, Mr. Finnie for
33 years. Most of the support staff are in their 14th year or beyond.

There is even a field hand with 29 years with
the company. The result is an incredibly stable
operation. "I think the best indication of
our stability occurred when the oilpatch was tightening
up". "We had about half-a-dozen customers
come to us looking for jobs." Mr. Finnie notes
having such a dedicated staff is a true rarity
these days, especially in an industry subject to
so many swings. "I really wish I could outline
the recipe for it," he says. "But honesty
and fairness are two words I think I would attribute
to each and every employee here."

The value of stability guides the company's corporate
philosophy as well. Though the company was active
in Costa Rica, West Africa, Scotland and Australia
prior to 1985, Continental has resisted the lure
of going it alone in the lucrative but often volatile
international markets, preferring to take low-risk
jobs in a piggyback arrangement with credible operators
known to the company. Still, Mr. Finnie hardly
considers such a conservative approach a detriment
to the company. "When you have survived things
like the downturn in the oilpatch, you get rather
guarded about where you direct your money," he
confesses. "Going international requires a
significant amount of funds. We've enjoyed a number-one
status in our industry with our clientele, even
through the downturns, because we avoided these
capital-intensive commitments."

Mr. Finnie is equally guarded about disclosing the privately-held company's
financial volumes, and all Mr. Pennington will admit to is that the past five
years have been "exceptional." Such modesty is simply a reflection
of the company's corporate image: Continental is a company which prefers a
low-key approach to making a show of its success like some sort of strutting
peacock. "We're not a glitzy oilfield company," he says. Even our
trucks are low-key. They are white and our logo is about four-inches high by
eight-inches long on the door." The measured success and earned respect
has helped Continental Laboratories come full circle in its 48th year. The
company undertook organized expansion by purchasing a controlling interest
in NorAm Wellsite Drilling Services of Billings, Montana. Like Continental,
NorAm was an outpost of the international empire which splintered in the early
80s. Mr. Pennington says the operation will offer the same high-quality products
and services offered by Continental to those Calgary companies with drilling
prospects in the U.S. With modern technology, our well site geologists can
transfer data from a well in Utah and print the logs and take them to a company
in downtown Calgary in a matter of minutes," says Mr. Pennington. "This
is just another way to satisfy our Canadian customers."